Phil Castle, The Business Times

When it comes to the Mesa County real estate market, the i’s have it — as in higher interest rates and lower inventories that have slowed sales.

“It’s more of the same — interest rates and inventories,” said Annette Young, administrative coordinator at Heritage Title Co. in Grand Junction.

Robert Bray, chief executive officer of Bray & Co. Real Estate based in Grand Junction, agreed higher interest rates on mortgages have slowed sales. But some purchasers are buying down interest rates or proceeding with transactions with the expectation they’ll refinance mortgages when rates go down.

Moreover, the escalation in home prices that continued at a double-digit pace over the past two years has slowed, Bray said.

Young said 298 real estate transactions worth a combined $121 million were reported in Mesa County in September. Compared to the same month last year, transactions declined 19.7 percent and dollar volume decreased 26.6 percent.

Seven large transactions worth a total of $7.6 million bolstered dollar volume, Young said. They included the sale of an industrial property for $3.88 million, a farm and ranch property for $1.4 million and a house on 6 acres bordering the Colorado National Monument for $1.1 million. Still, 10 transactions accounted for a collective $24.2 million the same month last year.

Through the first three quarters of 2023, 2,806 transactions worth a total of $1.23 billion were reported, Young said. Compared to the same span in 2022, transactions were down 27.2 percent and dollar volume lagged 26.9 percent.

According to numbers Bray & Co. tracks for the residential real estate market, 219 transactions worth a total of nearly $92.5 million were reported in September. Compared to the same month last year, transactions declined 22.3 percent and dollar volume fell 26 percent.

Through the first three quarters of 2023, 2,109 residential transactions worth a total of almost $909 million were reported. Compared to the same span in 2022, transactions fell 20.1 percent and dollar volume decreased 19.6 percent.

Young said higher interest rates on mortgages combined with what’s been higher prices have made homes less affordable. Moreover, existing homeowners with comparably lower-interest mortgages remain reluctant to sell their homes for fear of paying higher interest rates. Low inventories contribute to higher prices.

Bray said there 514 active residential listings in Mesa County at the end of September. That’s down 15.3 percent from the same time last year.

New home construction continues to lag as well, he said. Through the first three quarters of 2023, 361 building permits for single-family homes were issued in Mesa County. That’s down 40.6 percent from the same span in 2022. Builders face higher interest rates on construction loans as well as more cautions lenders and uncertainty in the market, Bray said.

The pace of rising home prices has slowed, however.

The median price of homes sold in the first three quarters of 2023 was $390,000. That’s an increase of only eight-tenths of a percent from the same span in 2022, Bray said.

In contrast, home prices increased 19 percent between September 2021 and September 2022 and 13 percent for the same span between 2020 and 2021, he said.

Looking ahead, Bray said he expects year-end transactions for 2023 to come in 15 percent to 20 percent lower than 2022 even as dollar volume declines proportionally. Median home prices should remain flat or even decline slightly as inventory increases.

Interest rates could retreat during the first half of 2024, he said, although current rates remain comparable to the average over the past 30 years.

Young said 32 property foreclosure filings were reported in Mesa County in September, the most for any month this year. But only three foreclosure sales occurred.

Through the first three quarters of 2023, 192 filings and 34 sales were reported. Compared to the same span in 2022, filings edged up by four and sales declined by five, she said.